By Lise Alves, Contributing Reporter
SÃO PAULO, BRAZIL – With the devaluation of the U.S. dollar in relation to the Brazilian real in April, Brazilian tourists spent more than US$2.34 billion abroad that month, announced the country’s Central Bank on Friday, setting a historical record.
Expenditures abroad for the first four months of the year totaled US$8.21 billion, increase of 1.7 percent in relation to the same period in 2013. For the entire year of 2013 Brazilians who went abroad spent US$25.3 billion.
According to economists the surge in foreign spending can be linked to the devaluation of the US dollar in relation to the Brazilian real in April. The U.S. currency fell from around R$2.40 to US$1 in January and February to R$2.23 to US$1 in April, down by 1.74 percent. The devaluation of the dollar lowered the prices of dollar-priced airline tickets and hotels abroad and made foreign products more affordable for Brazilian nationals.
The increase in foreign travel comes even with the increase, by the Brazilian government, of the IOF (Tax over Financial Operations) in foreign currency payments made with debit cards, traveler checks and pre-paid foreign currency credit cards, from 0.38 percent to 6.38 percent at the end of the year. Previously the IOF tax was only applied to international credit cards.
Foreigners coming to Brazil left US$547 million in the country in April, down by 6.5 percent from that registered in April of 2013. For the first four months of 2014, revenues from foreigners in Brazil totaled US$2.318 billion, however this is set to get a major boost from the FIFA World Cup happening June 12th to July 13th this year across twelve Brazilian cities.
International travel is part of the services industry segment in Brazil’s trade balance. The services industry in April registered a deficit of US$4.4 billion.
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